The power generating arm of Manila Electric Co. (Meralco) will decide in the “next few months” whether it would proceed to build its 2x600-megawatt (MW) ultra supercritical coal-fired power plant in Atimonan, Quezon as a merchant plant given that its power supply deal still hangs, chairman Manuel V. Pangilinan said.
Meralco Powergen Corp. (MGen) is continually assessing its possible moves for Atimonan One Energy Inc. (A1E), Pangilinan said.
The power supply agreement (PSA) between Meralco and MGen is still awaiting regulatory approval from the Energy Regulatory Commission (ERC).
“I think it has been discussed internally, whether we should proceed,” Pangilinan said. “Hopefully in the next few months we can decide whether to proceed or not independent of our PSA.”
With a project cost of P135 billion, A1E was originally expected to be completed by 2021.
But with the delay in the approval of its PSA, MGen has been looking at the possibility of putting up the power plant and offering its capacity to the wholesale electricity spot market (WESM) instead, because of the projected tight power supply in the grid.
“We’re anticipating this situation where we have tight power supply,” Pangilinan said, as the Luzon grid has been placed on yellow alert for three days this past week.
A yellow alert means there were not enough reserves to cover the largest running generating unit at the time, but does not necessarily lead to power outages.
Despite the delays and increasing project cost due to interest, MGen president and CEO Rogelio Singson said the group continues its intent to put up the power plant as it would be a critical supply contributor to the Luzon grid.
“We’re still hopeful. The technology is still the same, it’s the highest form of coal plant. Plus we’ve locked in our EPC (engineering, procurement and construction) contractor,” he said.
Per month since the loan was finalized in November 2017, MGen has been incurring an increase in cost of P15 to 20 billion from the delay.
“We continue to engage with the banks. We continue to show our commitment to the project and keep negotiations running with the seven commercial banks,” Singson said.
For the Atimonan project, MGen has signed a mandate letter for a loan of up to P107.5 billion from eight banks.
The Atimonan power plant was granted a certificate of energy project of national significance (CEPNS), entitling it to all rights and privileges under Executive Order (EO) 30 signed by President Duterte, requiring speedy permitting process from agencies.
Energy Secretary Alfonso Cusi said the CEPNS certifies that the project is a critical part of achieving an additional supply of 14,000 MW by 2025 and to meet higher power demand of the Luzon power grid by 2021.